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mergers-and-acquisitionsA successful exit strategy: the Holy Grail of most, if not all, business owners.

This week, in an exclusive piece of research conducted by Zephyr in association with Knight Corporate Finance and Clarion Solicitors, we document the hundreds of successful exit strategies to have taken place within the wider creative sector in the North over the past five or so years.

Our detailed study into recent M&A activity represents the first time such information has been collated and presented, and certainly the first time it has concentrated on both our sector and region.

Over the coming week we will detail the Northern-based companies who have bought companies outside the North, while we’ll also look at the VC, business angel and other deals.

But for today and tomorrow, the focus turns to the deals regarding those Northern companies who have been acquired.

Jonathan Simms, Partner at Clarion, said: “This is a sector that is booming, and the demand for talent to secure long term clients is paramount. As well as developing home grown talent within an agency, mergers and acquisitions can provide a great opportunity to bring in fresh ideas, new client contacts and new in-house service lines.

“In our experience, a successful agency has strong leadership, a commercially focussed management team and most importantly an excellent pool of creative and technically gifted people. Keeping ahead of competitors requires a constant drive to develop and retain key people who can ensure that the agency continues to evolve and adapt its offering to its clients. Standing still is not an option.”

The research reinforces the impression of the North as a hugely fertile territory for deals, and also reiterates the ever-changing nature of the creative industries landscape.

gibson

Michael Gibson

One of those closely involved in a deal below is Michael Gibson. As managing director, he grew Fat Media from a small office in Lancaster to the point it was acquired by entrepreneur David Durnford for a seven-figure sum in 2014.

As well as being chair of Digital Lancashire, he now covers the Northern region for Advertising M&A, a specialist M&A consultancy.

‘Digital agencies are not that sexy anymore’

He points to the emergence of a new “middle sector” of target-hungry companies.

“There are the major agency groups – the likes of WPP and Dentsu Aegis – who are always looking, but a key development has been the growth of a middle sector who are trying to build interesting agency groups.

“So you’ve got companies like St Ives, Paperhat and Attercopia who are building a sum of parts that is worth greater together. If you put 10 £2m agencies together, that’s £20m, with say £4-5m profit, so that’s why we’re seeing more do that.”

He said that buying companies were looking for one of two things in targets: the ability to fill a gap through either its location or offering, and also the “sexy next big thing”. “Digital agencies are not that sexy anymore,” Gibson added, “there are 180 of them in Lancashire alone.”

Rob Shaw

Rob Shaw

From the selling company’s perspective, Gibson said that many agencies were having to “fundamentally” look at their business models on a regular basis, just to keep up.

“Take SEO agencies – in the early days it was a numbers game, but now it’s moved into content marketing which trips into PR, and it’s all about how you prove value. Virtually every agency I know has moved into software – take Richard Gregory at Ruler Analytics, Neil McKay at Endless Gain, or Al Mackin at Formisimo.”

‘Don’t sell – be bought’

Over in Yorkshire, Rob Shaw was closely connected to one of the largest deals on the list, the £18m acquisition of Epiphany by Sheffield-based Jaywing.

He advised businesses looking for an exit strategy to simply focus on building the best company they could.

“Don’t sell – be bought,” he said. “You build the company that’s so attractive people will come to you. Of course there’s a process to it as well, but people will gravitate to you.”

He said the practical and cultural alignment of the two businesses had “taken longer than expected”, but “you can’t force people, you’ve just got to let that happen”.

Simon Hayward

Simon Hayward

He added: “Genuinely, it’s been a positive experience. It’s allowed Epiphany to leverage the wider Jaywing, the skills, case studies and access to clients that perhaps we didn’t have. The most material impact is that it’s allowed us to build new products – such as a tool called Almanac that tracks both online and offline behaviour to get a complete view of the customer.”

‘Culturally it was a good fit’

Simon Hayward led the 2013 merger of brand engagement and leadership specialist Cirrus – then just two years old – with Cheshire agency The Raft.

He said it “wasn’t an easy process” as both agencies brought together experiences, processes and mindsets.

“I think we could probably have done more of getting people to walk in each other’s shoes more quickly. It’s all very well talking about it but you only really learn when you get out,” he said.

“The richness comes from working through all that rather than compromising with the lowest common denominator.”

Cirrus had around a dozen employees at the time of the deal, but headcount now totals over 50. “The Raft were already a supplier so we knew them and knew each other and knew they were very good and responsive. Culturally it was a good fit,” he said.

Partners

Our partners for the M&A Week initiative:

Knight_Primary_Logo_DarkBlue-01Knight Corporate Finance was founded by Adam Zoldan and Paul Billingham in December 2008 with the specific aim of advising businesses and entrepreneurs in the telecommunications, media and technology (TMT) sector. Both founders spent long periods of their careers in senior commercial and operational roles in the sector and bring a unique level of experience to transactions based on genuine industry knowledge.

Knight advises its clients on Strategy, Funding, Acquisition and Exit, and has completed over 70 transactions establishing itself as one of the leading corporate finance boutiques in its sector. The business has a team of nine professionals with offices in London and Warrington.

Clarion-only-logoClarion, a Leeds-headquartered law firm, has brought together a team of highly rated lawyers, many from national and international law firms, who work without the restrictions and cost implications associated with international legal practices.

It is widely recognised for its expertise and dynamic handling of sensitive, high profile and complex situations in the UK and internationally.

Northern creative companies acquired between 2010 and 2016 (Part 1)

Date Target name Location Subsector Deal value
mil GBP
Deal type Acquiror name
12/01/2010 Latitude Group Ltd Leeds Marketing & Communications n.a. Institutional buy-out 100% MBO Team
28/01/2010 Redwood Press Ltd Manchester Printing n.a. Acquisition 100% Call Print Group Ltd
19/02/2010 Infoserve Group plc Leeds Marketing & Communications 2.00 Acquisition 67.712% Mr David Hood
19/02/2010 Rocketfish Ltd Southport Digital Services 0.50* Minority stake unknown % Mr Daniel Birke
01/03/2010 New Media Choice Ltd Brigg Marketing & Communications n.a. Acquisition 100% Edge Interactive Ltd
03/03/2010 QIC Print (Cumbria) Ltd Carlisle Printing n.a. Acquisition 100% Mr Hugh Wratten
08/03/2010 Robson Brown Ltd Manchester Marketing & Communications n.a. Acquisition 100% Round 2 Media International LLC
06/04/2010 Best Cover UV Ltd Bury Marketing & Communications n.a. Acquisition 100% Best Cover UV Ltd’s undisclosed previous owner
07/04/2010 Lick UK Ltd’s assets Leeds Digital services n.a. Acquisition 100% Lick Group Ltd
11/05/2010 Radius Design & Marketing Ltd Manchester Marketing & Communications n.a. Acquisition 100% Bowdon Investments Group plc
14/05/2010 Grove House Publishing Ltd Macclesfield Publishing 1.64* Acquisition 100% Ten Alps plc
31/05/2010 Raft Marketing Ltd, The Wilmslow Marketing & Communications n.a. Management buy-out 52.5% Mr Shaun Keef, Mr Phil Howells
16/06/2010 APG Visual Colour Ltd’s assets Stockport Printing n.a. Acquisition 100% Character Mailing Services Ltd
20/07/2010 Fuse 8 Group Ltd Leeds Digital Services 5.00 Acquisition 100% Award International Holdings plc
29/07/2010 Ipso Facto Films (Nasty Neighbours) Ltd Newcastle Upon Tyne TV production 0.15 Minority stake unknown % NorthStar Equity Investors Ltd
03/09/2010 Identify Engraving Systems Ltd Washington Marketing & Communications n.a. Acquisition 100% Trotec Laser Ltd
10/09/2010 Charlesworth UK Ltd Nottingham Printing 2.00 Acquisition 100% Alpha Educational Print Ltd
19/10/2010 Tech Litho Ltd Bootle Printing n.a. Acquisition 100% Character DPM Group Ltd
19/10/2010 APG Visual Colour Ltd Manchester Printing n.a. Acquisition 100% Character DPM Group Ltd
19/10/2010 Tudor Print & Design Ltd Liverpool Printing n.a. Acquisition 100% Character DPM Group Ltd
20/10/2010 Attinger Jack Advertising Ltd Manchester Marketing & Communications n.a. Acquisition 100% Round 2 International – UK Ltd
01/11/2010 Paramount Print Group Ltd Manchester Printing n.a. Acquisition 100% Character DPM Group Ltd
16/11/2010 Kendall Press Ltd Altrincham Printing n.a. Acquisition 100% MTS Press Ltd
01/12/2010 Delete Digital Marketing Ltd Leeds Digital Services 0.40 Acquisition 100% Fuse 8 plc
23/12/2010 Wisden Cricketer Publishing Ltd York Publishing n.a. Acquisition 100% Lord Marland, Mr Jonathan Agnew, Mr Christopher Martin-Jenkins, Mr Neil Davidson, Mr Simon Hughes
31/12/2010 LINPAC Group London, Pontefrac, Castleford, Cheadle, Newport TV production n.a. Institutional buy-out Chamonix II LP
06/01/2011 Dene Group Newcastle Upon Tyne TV Production 0.65 Minority stake unknown % NEL Fund Managers Ltd, FW Capital Ltd
17/01/2011 Orbitron Ltd Leeds Marketing & Communications n.a. Acquisition 100% DMWSL 620 Ltd
19/01/2011 Paton Brown Ltd Bury Marketing & Communications n.a. Management buy-out 100% MBO Team – United Kingdom
31/01/2011 Latitude Digital Marketing Ltd Leeds Marketing & Communications n.a. Acquisition 100% Callcredit Information Group Ltd
04/03/2011 Watermark Publishing Ltd Dewsbury Publishing n.a. Acquisition 100% UK Greetings Ltd
08/03/2011 Media Sales Network Ltd Manchester Marketing & Communications n.a. Management buy-out 100% MBO Team – United Kingdom
16/03/2011 Pier Professional Ltd Bingley Publishing n.a. Acquisition 100% Emerald Group Publishing Ltd
08/04/2011 Character DPM Group Ltd Manchester Printing n.a. Acquisition 100% Magnadata International Ltd
15/04/2011 JM Roberts Print Ltd Manchester Marketing & Communications n.a. Acquisition 100% Boss Direct Ltd
15/04/2011 Ioko 365 Ltd York Marketing & Communications 50 Acquisition Piksel
18/04/2011 Plotters Plus Ltd Manchester Printing n.a. Acquisition 100% Undisclosed acquirors
17/06/2011 McClelland Publishing Ltd Manchester Publishing n.a. Acquisition 100% Media Sales Network Ltd
01/07/2011 Imagesound plc Chesterfield Music Production 10.23* Institutional buy-out 100% Concentia Capital Ltd
26/07/2011 GA Pindar & Son Ltd’s web offset printing and bindery division Scarborough Digital services n.a. Acquisition 100% York Mailing Ltd
28/07/2011 Bridge + Tunnel Productions Newcastle Upon Tyne TV production 0.05 Minority stake unknown % NorthStar Equity Investors Ltd
15/08/2011 WRG Creative Communications Ltd Manchester Marketing & Communications 12.00 Minority stake unknown % LDC
23/08/2011 Bezier Holdings Ltd Ossett Printing n.a. Institutional buy-out 100% MBO Team, HIG Capital
24/08/2011 Pearson Print Ltd Bury Printing n.a. Acquisition 100% RAP Spiderweb Ltd
13/09/2011 GA Pindar & Son Ltd’s confidential printing operation Scarborough Printing n.a. Acquisition 100% Secure and Confidential Documents Ltd
14/09/2011 so2say communications Ltd Leeds Marketing & Communications n.a. Acquisition 100% Healthcare Information and Management Systems Society
19/09/2011 RKA Records Ltd Darlington Music Production 0.05 Acquisition 79% Mr Duncan Bannatyne
26/09/2011 IVE Global Ltd Salford Marketing & Communications n.a. Acquisition 100% Lead Creators Ltd
19/10/2011 Hangar Seven Ltd Stockport Marketing & Communications 1.00 Minority stake unknown % Catapult Venture Managers Ltd
01/12/2011 Brilliant Independent Media Specialists Ltd Leeds Marketing & Communications n.a. Acquisition 100% MediaCom Worldwide Inc.
07/12/2011 Intermarketing & Communications Group Ltd Leeds Marketing & Communications n.a. Management buy-out 100% MBO Team – United Kingdom
10/01/2012 Mawers Ltd Darlington Printing n.a. Acquisition 50% Mr Phil Evans, Mr Phil Harburn
16/01/2012 Fuse 8 Group Ltd Leeds Digital Services n.a. Acquisition 100% Mr Mark Walton, Mr Andy Hutchinson
19/01/2012 Rawlings Financial PR Ltd York Marketing & Communications n.a. Acquisition 100% Tavistock Communications Ltd
23/01/2012 SF Taylor & Co Ltd Manchester Printing n.a. Acquisition 100% Chatham House
02/02/2012 M Media & Design Ltd Hartlepool Marketing & Communications n.a. Merger 100% Property Webmasters Ltd
09/02/2012 Adversion Ltd Norwich Marketing & Communications n.a. Acquisition 100% Banner Managed Communication Ltd
23/02/2012 Selpack Ltd Huddersfield Printing n.a. Acquisition 100% Print-Leeds Ltd
09/03/2012 GW Askew & Son (Printers) Ltd Doncaster Printing n.a. Acquisition 100% Whitesprint Group Ltd
23/03/2012 Delta Labelling Ltd Washington, Hong Kong Printing 12.50 Acquisition OpSec Security Group plc
27/03/2012 Brand Addition Ltd, Kreyer Promotion Service GmbH Manchester, Hagen Marketing & Communications 24.00 Institutional buy-out HIG Milan UK Bidco Ltd, B270 Vermögensverwaltung GmbH
03/04/2012 Pelican Press Ltd, The Manchester Printing 0.02 Acquisition 100% Eastland Colour Ltd
03/04/2012 Survival Media Ltd Liverpool Publishing n.a. Minority stake unknown % AXM Venture Capital Ltd
13/04/2012 Cypher Digital Imaging Ltd Carlisle Printing n.a. Acquisition 100% H&H Group plc
20/04/2012 Advertising Principles Ltd Leeds Marketing & Communications n.a. Acquisition 100% Advertising Principles Holdings Ltd
16/05/2012 Raft Marketing Ltd, The Wilmslow Marketing & Communications n.a. Acquisition 100% Cirrus Connect Ltd
21/05/2012 Product Revolution Ltd Houghton-le-Spring Digital Services n.a. Acquisition 100% SONE Products Ltd
23/05/2012 Sentric Music Ltd Liverpool Music Production n.a. Minority stake unknown % AXM Venture Capital Ltd
11/06/2012 Momentum Instore Ltd Macclesfield Marketing & Communications n.a. Management buy-out 100% MBO Team – United Kingdom
11/06/2012 Lakestar Media Limited Manchester Marketing & Communications n.a. Acquisition 100% McCann Worldgroup
18/06/2012 Pixel One Ltd Rotherham Digital Services n.a. Merger 100% DM2 Creative Ltd
19/06/2012 Garden Marketing Ltd, The Leeds Marketing & Communications 0.40 Minority stake 49% Communisis plc
20/07/2012 Print 5 Ltd Wirral Printing n.a. Acquisition 100% Link Mailing Ltd
23/07/2012 Room 501 Ltd Seaham Digital Services n.a. Acquisition 100% Business & Enterprise Group
31/07/2012 Trylife Ltd Newcastle Upon Tyne TV production 0.15 Minority stake unknown % NorthStar Equity Investors Ltd
01/08/2012 Intoprint (UK) Ltd Leeds Printing n.a. Institutional buy-out 50% Seneca Investments Ltd
15/08/2012 Canyon Associates Ltd Manchester Marketing & Communications n.a. Acquisition 100% WRG Creative Communications Ltd
30/08/2012 Marketing Leeds Ltd Leeds Marketing & Communications 0.50 Minority stake unknown % Government’s Regional Growth Fund
20/09/2012 Carbon Digital Ltd Salford Digital Services n.a. Minority stake unknown % AXM Venture Capital Ltd
03/10/2012 At One Communications Crewe Printing n.a. Acquisition 100% Printing House Ltd, The
04/10/2012 Iris Associates Ltd Sheffield Digital Services 2.40* Acquisition 100% Brand Communications Ltd
09/10/2012 Sports Publications Ltd Leeds Publishing n.a. Management buy-in/buy-out unknown majority stake % BIMBO Team
24/10/2012 Tameside Reporter, Glossop Chronicle Glossop Publishing n.a. Acquisition New Charter Housing Trust Ltd
01/11/2012 Diamond Print Express Ltd Hessle Printing n.a. Acquisition 100% D3 Office Group Ltd
09/11/2012 Barker Brooks Communications Ltd Leeds Marketing & Communications n.a. Acquisition 100% Sleekside Ltd
19/11/2012 Wood Holmes Group Ltd Newcastle Upon Tyne Digital Services n.a. Acquisition 100% Explain Market Research Ltd
30/11/2012 Monarch Indexing Company Ltd Barnsley Printing n.a. Acquisition 100% Ace Bookbinders Ltd
20/12/2012 MSM Media Ltd Manchester Marketing & Communications n.a. Acquisition 100% A J Bell Holdings Ltd
07/02/2013 Ph Creative Ltd Liverpool Marketing & Communications 0.50* Minority stake unknown % Enterprise Ventures Ltd
22/02/2013 Eye Corp (UK) Ltd Harrogate Digital services 3.30 Acquisition 100% Airport Partners Ltd

zephyr

Data compiled by Zephyr

See our full M&A series:

M&A Week Day 1: Northern creative companies acquired between 2010 and 2016
M&A Week Day 2: Northern creative companies acquired between 2010 and 2016 (part 2)
M&A Week Day 3: The Northern acquirers buying companies based elsewhere
M&A Week Day 4: Northern targets for Private Equity and VC deals
M&A Week Day 5: Mergers and acquisitions in the creative industries: a concluding perspective